Cities and counties dumping hospitals in advance of ObamaCare

posted at 9:30 am on August 31, 2010 by Ed Morrissey

Hey, maybe they just need some reeducation! Either that, or cities and counties that already have stressed budgets and limited means of raising revenues are looking to escape the vastly escalating costs of providing health care. The Wall Street Journal reports that many of these facilities are providers of last resort — the exact places where millions of new Medicaid patients would have gone for care:

More than a fifth of the nation’s 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don’t enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.

Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.

Moody’s Investors Service said in April that many standalone hospitals won’t have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either. Meantime, the federal government is expected to cut aid to hospitals.

“We’ve been hit by that whiplash recently, with industries closing down and the number of insured growing less,” said J.D. Mosteller, the attorney for Barnwell County, S.C., which is considering selling its hospital.

Right now, that just means that the facilities get sold to for-profit chains. Those organizations don’t necessarily have a mandate to keep underperforming locations open for business, however. Given that these hospitals and clinics usually service the people who pay the least — Medicaid and indigent patients — they will likely get the axe as companies consolidate. Cities and counties have little choice but to get out of the hospital business for the same reason, especially when the 16 million Medicaid patients start flooding their waiting rooms because private-sector providers won’t accept Medicaid reimbursement rates.

Government sales of hospitals and clinics have hit a rate not seen in almost twenty years. It’s the result of years of neglect of the problems inherent in the third-party payer system and especially the government-run systems that generally feed these locations, but certainly ObamaCare doesn’t help, for the above reasons. The rational policy choice would have been to pursue reforms that eliminated the tax breaks on third-party-payer comprehensive insurance and moved people to reliable and inexpensive catastrophic policies, where young people have the same interest in protection and share the risk pool willingly with older people and pay premiums that make sense for themselves. Rather than dictating reimbursements from Washington, these facilities would have been able to work with higher-paying private insurers — and kept these cities and counties from diving into a sea of red ink.

As ObamaCare produces more demand at ridiculously low reimbursement rates, private-sector providers will simply refuse to accept them, and these hospitals are expected to take up the slack. What happens when they’re no longer around? That Medicaid expansion won’t mean much at all in that circumstance.

We should stop calling them unintended consequences because the zerO administration intends all the harm it’s doing to America. Either that or they’re the stupidest bunch of people who ever ran anything.

More than a fifth of the nation’s 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsuredillegal alien patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times.

Whatever Govt regulates or controls, there will end up being less of it. What happens when all the folks who used these services go to private for profit hospitals and they can’t stay open because they are losing too much money? Will the Govt then open clinics everywhere to provide their substandard health care? Get ready to tear off a number and wait.

The rational policy choice would have been to pursue reforms that eliminated the tax breaks on third-party-payer comprehensive insurance and moved people to reliable and inexpensive catastrophic policies, where young people have the same interest in protection and share the risk pool willingly with older people and pay premiums that make sense for themselves.

An even better policy choice would be: no insurance, no cash upfront, no treatment. Healthcare is a service, not a right.

This is just part of the plan for the Federal Government to take over all aspects of the health care system. This isn’t an accident, it’s by design. Coming soon to Saint Anne (patron saint of women in labor) “Abortions on Demand”.

we will now see a resurgence of churches taking the lead on compassionate care for the sick and injured as well as house calls by enterprising medical personnel….

and so it shall be.

ted c on August 31, 2010 at 9:32 AM

If you are correct, then I would argue that churches should have been doing this all along, and that things have been restored to the way things always should have been.

My collie says:

If you are wrong, it may be because there are no longer enough compassionate Christians left in our society to shoulder the burden of caring for the sick. If that is the case, then our people will all get pretty much what they deserve.

There was an article in my local paper last week that the (NC) state prison is going to start billing Medicare for as much as possible for inmate healthcare in order to reduce costs. Not so coincidentally, the hospital closest to the prison announced yesterday that they will limit the number of inmates they can see for care. I know they see that handwriting on the wall that they will get much less in reimbursement from Medicare!

The churches can only do so much. If all citizens are taxed into the ground and unemployment remains high, then it doesn’t matter how compassionate or willing to help Christians are — we simply won’t have the funds to care for other people. All we can do is share our food and pray for you.

What did they expect? Taxes(over $B500) and added costs start on day 1, the benefits and outlays don’t start for 4 years. That was the only way they could make it revenue neutral, even with their false assumptions and number fudging.

This is not rocket science.

Just like cash for clunkers, the people hurt most will be the ones who can least afford it.

then it doesn’t matter how compassionate or willing to help Christians are — we simply won’t have the funds to care for other people. All we can do is share our food and pray for you.

CambellBrown on August 31, 2010 at 9:54 AM

it does matter. It has always mattered–the poor, the sick, the elderly and the needy will always be with us. They were with us when we were (past tense) an extraordinarily wealthy nation, and they’ll be with us when we are not. Some things don’t change.

Maybe, but I’m guessing a bigger problem is a spike in people who are unemployed or underemployed and have decided that they can’t afford (or choose not to pay) the ridiculous premiums in the individual market.

If the government continues to be anti-religion, one would suspect that tax exempt status for churches is probably not going ot be around much longer. That would put a big crimp in the ability of churches to step up with humanitarian aid.

If the government continues to be anti-religion, one would suspect that tax exempt status for churches is probably not going ot be around much longer. That would put a big crimp in the ability of churches to step up with humanitarian aid.

WashingtonsWake on August 31, 2010 at 9:59 AM

Give to Caesar that which is Caesar’s, and give to God that which is God’s.

The churches can only do so much. If all citizens are taxed into the ground and unemployment remains high, then it doesn’t matter how compassionate or willing to help Christians are — we simply won’t have the funds to care for other people. All we can do is share our food and pray for you.

CambellBrown on August 31, 2010 at 9:54 AM

You are correct. Our Christian neighbors can do only so much. The rest is up to society at large. Voici:

if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.
— 2 Chronicles 7:14

In the, I hope unlikely, event that the government continues to amass power I suspect that there will be several lays of ‘undernet’ developing. First, the encrypted sub-network on the internet, then the network of dodgers and rebels in places like churches.

The more they clamp down on freedom, the more people will slip through their fingers. The more ‘enemies of the state’ they’ll generate and ultimate create their own downfall. Obamacare has within it, the seeds of the destruction of the left.

no it doesn’t matter. I’m talking about churches being able to get you your heart medication. If there’s no money and no jobs, then all we can do it pat you on the back and pray for you.

It’s all well and good to imagine a new nation of Mother Theresas, but you know what? That’s not quite the same as life-saving surgery or medication. I think there’s a distinction on what the church is realistically going to be able to provide.

ted c.,
fair enough, but if you tax the churches, that does leave fewer resources for them to help the needy. I know that I’d give less to church if it was taxed – i’d go directly to the people in need to avoid the tax. It’s just a matter of wanting ot maximize the impact of my help. Behavior changes to account for reality, reality does not bend to accomodate our wishes.

A government hostile and inept when it comes to the private sector is causing a myriad of problems across the board.

NoDonkey on August 31, 2010 at 9:43 AM

Yep. Read an article this morning about a little nugget in the Frank-Dodd “financial reform” law. It requires all companies to annually disclose the difference in pay between the CEO and the average employee.

Business analysts noted that it would be difficult and costly for large, multi-faceted businesses to calculate the amount paid to the “average” employee, since they have so many different types of employees in so many different geographical locations (with different costs of living, etc.). Analysts also predicted that the requirement will give businesses an incentive to out-source lower-paid work (destroying more American jobs).

But hey, it made Frank and Dodd feel good about themselves — which is something they probably needed after working so hard for so many years to destroy the housing market with their idiotic policies.

It’s all well and good to imagine a new nation of Mother Theresas, but you know what? That’s not quite the same as life-saving surgery or medication. I think there’s a distinction on what the church is realistically going to be able to provide.

CambellBrown on August 31, 2010 at 10:04 AM

sure, of course. As a healthcare provider, I can tell you that reality is that life-saving surgery AND medication are going to become increasingly scarce, rationed and unavailable. You’d rather have a church step up and care for you than to have Kathy Sebelius do it—no matter what care she thinks she can provide.

Just as there is a limit on government intervention and care, there is a limit on the power of prayer–and it’s limited only by our own faith in God.

Partly, and partly the fault of laws which mandate that hospitals with emergency rooms take all comers without regard to either ability or willingness to pay, without the Government reimbursing said hospitals for the effects of said laws.

Illegal aliens, as part of our underground and underpaid economy, are certainly going to take advantage of said laws. The other part is the one in six unemployed, who, when they need medical care, are going to get it for free at the emergency room — for the other choice is to pay and go hungry for a month.

These laws are like the Good Samaritan moving the seriously injured Levite to the inn and then telling the Levite and the innkeeper that the innkeeper is responsible for said Levite’s care. After all, if we take money from one person in the village and give it to another, the village isn’t harmed, right?

It’s why many private hospitals are closing their emergency rooms — the emergency room is the one hospital organ which, when it fails, hemorrhages money. Public hospitals, for political reasons, don’t have this option, so their “owners” must divest (an indirect and less politically charged way of getting rid of the emergency room obligation).

I just wonder if this was really an unintended consequence, or if the people responsible for ObamaCare really are nihilists and just want to keep introducing more chaos into the system until it finally just collapses.

As ObamaCare produces more demand at ridiculously low reimbursement rates, private-sector providers will simply refuse to accept them, and these hospitals are expected to take up the slack. What happens when they’re no longer around? That Medicaid expansion won’t mean much at all in that circumstance.

Easy answer — the left will begin a push to mandate private hospitals take care of Medicare/Medicaid patients no matter what the government reimbursement rate. After November’s election, the Democrats won’t have the votes on their own to mandate such a tactic, but you can bet the public relations spin and the stories the big media will peddle in the future will portray private hospitals as heartless, greedy institutions who are turning people away to die, in hopes of intimidating moderate Republicans into joining them in forcing for-profit hospitals into accepting major government-created losses.

Public and nonprofit hospitals—the latter of which represent three-fifths of all U.S. hospitals and are sometimes affiliated with a religious denomination—can be appealing targets for private operators, which are betting that the new federal law will eventually yield more paying, insured customers.

Betting on more paying, insured customers. Not sure if that is a good bet. If the insurance people have is through the government and the government is setting the rate for what they will pay out to hospitals if they pay under what the service is worth the “for profit” hospitals will cut that service or close the hospital.

That would be nice in a Christian nation, but too many people are trying to get rich by suing priests for the Church to run charity hospitals at a loss…

Steve Z on August 31, 2010 at 10:23 AM

now that the churches will be getting taxed, the hospitals are going to be closed, but the sick and injured remain….the incentive to sue is gone or reduced, the incentive to help is still there and the question is, who’s going to do it? Let me guess, the all seeing, all powerful, all benevolent Kathleen Sebelius? ….heh…not hardly.

If you are wrong, it may be because there are no longer enough compassionate Christians left in our society to shoulder the burden of caring for the sick. If that is the case, then our people will all get pretty much what they deserve.

CyberCipher on August 31, 2010 at 9:46 AM

Look at what Massachusetts tried to do the the Catholic Hospitals — obligate them to provide abortions. That’s just one little law out of many which cover hospital operations. Mother Teresa, were she still alive, would find it very hard to operate any kind of healthcare facility here in the United States.

We have responded to libertarian (selfish) healthcare provider attempts to do what is lawful rather than what is right by passing more laws to prevent what is feasible but not right. And then we ponder why such laws are found to infringe on what is right as well…

1 in 6 getting government aid. If that applies to health-care where 1 in 6 eventually have some form of government backed health insurance those private operators are going to be gulping for air as their hospital ship sinks.

That would be nice in a Christian nation, but too many people are trying to get rich by suing priests for the Church to run charity hospitals at a loss…

Steve Z on August 31, 2010 at 10:23 AM

As a Catholic, I’m not sure that’s quite right. These people – the overwhelming majority victims — have a right to be made whole. We Catholics have an obligation to make them whole, because these priests abused authority we gave them…

With that said, you are right, but you are blaming the wrong people. Blame the priests who violated their Holy Orders. This is yet another example of where homosexuality has harmed others — because the overwhelming number of victims are male, while homosexuals (euphemism: hebephiles) within the priesthood are at the same level as outside society.

I wonder if the shuttering of these underperforming hospitals, or conversion to for-profit without the open doors policy to the uninsured will have an effect on the illegal population.

Heck, it could save places like California. Privatize these hospitals, and you could simultaneously cut a huge drain off of state budgets, and cause the migration of a huge chunk of the illegal immigrant population, further reducing the burden on the welfare state.

Chip Kahn, president and CEO of the Federation of American Hospitals, a trade group for chains that own nearly 1,000 for-profit hospitals, said his industry tends to run operations more efficiently, while adding capital.

If you want to check you theory- here’s a name/group to start your search with and see where they are and what is happening in the communities they are in.

Don’t hold your breath waiting for the Church to pick up the slack. A country that spent generations removing religion, and spirituality from the public consciousness cannot now call for assistance from those you have exiled. When you make the State your God, you reap the consequences.

It would seem that the Left’s mantra is that, if the poor cannot have the very best treatment, then the rich should not have it, either.

OldEnglish on August 31, 2010 at 10:55 AM

Well, of course! That is the communist way; drag everyone down to the same level under the guise of “fairness”. There used to be this American ideal where you had the opportunity to pull yourself up. I miss those days.

This portends a potentially complete social disaster. It’s too bad it had to go this far, but America has been in the grip of a lie for many decades now, and evidently it was necessary that she taste the bitter fruit of going her own way, in order that she turn around. And now it’s come on us. It took this, but as this tragedy unfolds there is hope that we will come back to the values that made us great, and to the One who set those values before us.

In all my days, I have never seen such an incompetent group of people in such high positions, and with arrogance to match. If this isn’t a spiritual wake-up call, I don’t know what one is.

Several years ago, the genius administrator of our local community hospital decided that the way to make money was to corner the market on Medicaid and Medicare patients. Well, he succeeded. Of course, in the process, he drove away all of the private patients and their doctors. What was once a vibrant and good-quality hospital that had served the entire community with a representative mixture of patients is now an entitlement center.

And now the money is gone, the quality is gone, and the hope is gone – they’re just waiting to die as the government reimbursement rates are cranked lower and lower.

The one thing we will NEVER see … an Islamic hospital that is open to all without any impositions. There is an abundance of Christian and Jewish hospitals to take up the health-care slack, but the Muslims are not so much into charity that benefits others.

You still have the choice to buy insurance and go to any hospital you want to go to , oh , did we neglect to tell you that under our ” reform ” they all went out of biz and the GOVERNMENT option is the only thing left ?
Here most hospitals have nice notice at the admission counter
It says by law if you have Medicaid they MUST admit you , but once you are stabilized , the FACILITY PAYS for the ambulance to transfer you to a hospital that accepts MEdicaid
Medicaid fee schedule is soooooooooooooooooo BAD , they would pay for your ambulance ride , well there’s HOPE N CHANGE for you

This is the intent of Obama and the democrat party. Hospitals will close, doctors will drop out of the profession and the US will end up with a lot of foreign doctors who barely speak English. At the present, the US imports thousands of nurses from the Philippines to work in Hospitals. Yes, Mr. Obama and the democrat party- Mission Accomplished. Wonder how the Obama and the democrats will try to blame this on George W. Bush?